Earth Trends by Martin Khor

Monday 6 August 2001

COUNTRIES SPEAK AGAINST A NEW WTO ROUND

A few developed nations and the WTO Secretariat have been putting out a media spin that almost all WTO member countries are agreeable to a “New Round.”  But a “stocktaking” meeting on 30-31 July 2001 of the WTO’s General Council showed a clear division between some developed countries championing the expansion of WTO powers into new issues, and a majority of developing countries which want to focus the WTO’s work on resolving the problems arising from the existing rules.   These deep differences have to be resolved if another Seattle-like fiasco  is to be avoided.

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On 30-31 July, the World Trade Organisation held an important meeting to review the “state of play” of its preparations for its forthcoming Ministerial conference in Doha (the capital of Qatar) in November.

Nobody wants a repeat of the last Ministerial meeting in Seattle in 1999, when disagreements could not be ironed out among the member states and the conference collapsed without a Declaration.

So the preparations for the Doha meeting have to be carried out much better this time around.

However, the meeting of its General Council in Geneva showed that the WTO member are just as deeply split as they were in Seattle, and a stormy period of three months lie ahead before the crucial Doha conference of Ministers.

The split is due to two very different visions of the role of the WTO.   The big powers want to expand the WTO’s functions far beyond its core trade mandate to include new areas such as investment, competition policy, government procurement and environment standards.

Most developing countries want the WTO to stick to trade issues, and even then to use the next few years to correct the inequities in the present rules.  When the current wide imbalances continue, expanding the WTO’s role would only make the divisions deeper.

The different positions, so far apart that they are perhaps irreconcilable, were too evident at  the Geneva meeting.

The European Union, backed by Japan and now the United States, are pushing strongly for a "new round" in the WTO.   By this they mean that the Doha Ministerial Conference should endorse expanding the WTO's mandate by deciding to negotiate new treaties or rules, including on investors' rights, competition policy, transparency in government procurement, trade facilitation, and the environment.

The EU is putting out a media spin that there is almost a consensus among WTO Members in favour of such a "broad, comprehensive" round, and that only a couple of hardline developing countries are opposed.  The EC's trade director-general Peter Carl painted this “rosy picture” again at a press conference, when he mentioned India and Malaysia as the two opposing countries.

However the EU's portrayal of a "convergence" of countries around a new round was clearly off the mark and Mr Carl himself was challenged by several journalists on this during his press briefing.

After all, the WTO meeting began with the WTO general council chairman, Stuart Harbinson, giving a "sobering assessment" that there were gaps between countries' positions in many issues and that those differences were “entrenched.”

When delegations gave their latest positions, it became clear that a large number (and not just a couple) of developing countries do not agree that Doha should initiate negotiations in the proposed new issues.

They expressed great disappointment that their requests for resolving serious problems arising from implementing the existing agreements had not been met.

These problems are of two categories:  the non-realisation of benefits because the rich countries have been tardy in implementing their commitments for opening markets especially in textiles and agriculture; and the problems caused to developing countries when they implement their own obligations including in  intellectual property, subsidies, agriculture, and investment measures.  

They argue that the existing WTO rules and their implementation are imbalanced against developing countries, in some ways retarding their development prospects, and that the imbalances have to be rectified to enable the trading system to benefit them.

Countries that spoke up strongest along these lines included Pakistan, India, Malaysia, Indonesia, Jamaica, Tanzania (representing the least developed countries) and Zimbabwe (representing the Africa Group).  

Pakistan's Ambassador Munir Akram said: "There were 50 proposals for urgent action on implementation. Decisions may be likely on only three issues at present. This justifies the evaluation there has been no welcome advances, no positive developments. Unless there are tangible results on implementation, we find it difficult to continue considering proposals to enlarge the negotiating agenda before, at or after Doha.  Under present circumstances there is very little prospect for agreement on the new issues."

The Indian Ambassador, S. Narayanan, also indicated his country could not accept investment, competition, transparency in government procurement and trade facilitation as negotiating issues for Doha, saying the differences in views between Members cannot be narrowed by then.  "It is clear there is no consensus on even one of the new subjects proposed, nor of expanding the negotiating agenda. We are also terribly disappointed and distressed at the lack of progress and political will in dealing with implementation issues even at this late stage," he said.

Malaysia's Ambassador Superamaniam expressed misgivings on how the Doha process had focused on the new issues as if these issues would make or break the Doha conference.  "It is abundantly clear the differences in positions are intractable,” he said.

“Clever drafting cannot resolve fundamental difficulties and this has to be recognised. We run the risk of a "Seattle Two" if we continue with the all-or-nothing course. It is clear we are in a state of impasse."   

He characterised the situation as "the four Ds":  discouraging, discomforting, demoralising and even depressing. “The reality is that the positions on a wide range of issues are sharply divided even at this critical phase."

Ambassdor Halida of Indonesia also made a strong statement.  She said: "Indonesia is deeply concerned over the initiative by some Members to launch a "comprehensive" round which includes new issues.  Indonesia has learned a very good lesson from past experience, that a proposal that looks fair on the surface may have very different and serious consequences.

“To understand what is really at stake we certainly need to understand fully all factors and

implications...Insisting to include issues which do not reflect the interests of all Members would be a perfect recipe for failure....The unrealistic expansion of the agenda will place at peril the success of the Ministerial Conference."

According to Jamaica's Ambassador Ransford Smith:  "Time is running out and we may be in danger of repeating recent history unless we focus first on necessary preconditions and secondly on what is possible at this time.  For us the resolution of implementation issues is a necessary pre-condition and unfortunately there is very little progress there. We do not believe that

beyond the built-in agenda many issues fall into the realm of what is possible.  We should admit the reality as quickly as possible."

Very significantly, the least developed countries (which are the 40 poorest members of WTO), represented by the Tanzanian Ambassador Ali Mchumo, told the WTO that the LDC Ministers at a meeting in Zanzibar last week had decided that they are not in a position to agree to negotiate new issues, and that the work of the Working Groups on these issues should continue instead.

Said Ambassador Mchumo:  “Given the fact that the issues involved are complex and divergent views continue to exist and that the new issues are yet to be fully understood, especially regarding their implications on LDCs' development, the Ministers were of the view that the study process should continue in the working groups and that time is not ripe for LDCS to undertake negotiations for multilateral regimes on these areas."

The Africa Group of countries, represented by Zimbabwe, also indicated their reluctance to entertain new issues at Doha.

With so many countries expressing their misgivings on the "new issues" in the proposed "comprehensive New Round", it is misleading to attempt to "spin" the image that almost all countries, except a couple of hardliners, have "converged" towards the launching of a New Round.

The truth is that a majority of WTO Members are opposed to or are not prepared to agree that the Doha meeting initiate negotiations towards new rules or agreements on new issues.  They are against the WTO increasing its mandate and through new rules that would land them with new burdens and obligations that could well block their development prospects further.

The credibility of the WTO is at stake not only in the eyes of the public but also among its developing country Members.  Between now and Doha the Member states have the opportunity to put it back on track as a trade organisation working for the development interests of the majority.

To do this, the rich nations have to show the will to rectify the inherent imbalances in the system and its rules, and not apply pressure on the weaker states to accept new rules and obligations that would make the imbalances much worse.

The lesson from the WTO's latest  "stocktaking exercise" is that many developing countries (in fact the majority) are very uncomforatble with the New Round idea, and the developed countries should not cause more consternation and anxiety by intensifying the pressure on them, as this will lead to even more polarisation and frustration.